Sinn Fein has drawn up ambitious plans to target up to 20 seats in the next Irish general election and is confident of winning at least six as part of its biggest ever political push into the Republic.

In an interview with The Observer, Mitchel McLaughlin, the party's national chairman, said electoral success next year could raise the extraordinary prospect of a coalition government with Fianna Fail. But it was a scenario he and many republicans would be personally opposed to, he added.

McLaughlin accepted that Sinn Fein TDs would have to swear allegiance to the Republic's constitution if the party entered government. The constitution recognises the sole legitimacy of the Irish Defence Forces and outlaws all other armed groups. But the IRA still claims it is the only legal military force in Ireland, tracing its legitimacy back to the 1916 Easter proclamation and the First Dail. McLaughlin said entry into any Irish government would be a 'Rubicon for republicans to cross'.

The Sinn Fein chairman said the party would hold a special Ard Fheis, or congress, to debate whether to enter government in Dublin. Fine Gael and Labour have both ruled out coalition with Sinn Fein while the IRA remains in existence.

Sinn Fein may win up to six seats but McLaughlin said his own private assessment was that the party would secure victory in four constituencies, allowing it to hold the balance of power in Dublin. Virtually ignoring the peace process and Northern Ireland, party activists have been told to focus on issues such as poverty, education, health and Europe.

Among the party's strongest candidates is convicted IRA gunrunner Martin Ferris who has a realistic chance of winning a seat in North Kerry. The party, now the second richest political force in Ireland, will also heavily concentrate resources in Dublin constituencies and in the border counties.

Speaking about the peace process, McLaughlin has - in the first admission of its kind by a senior Sinn Fein figure - admitted that the Provisional IRA was still active and that its guns 'are not entirely silent'. Asked about the recent spate of murders and punishment attacks blamed by police on the IRA, McLaughlin said: 'Only a fool would say that the IRA are completely silent.' Police on both sides of the Irish border insist that the IRA carried out the recent murders of alleged drug dealers in Dublin and Belfast. In the past 18 months the organisation has killed at least eight people.

The IRA is also believed to have been behind last month's theft of £4 million worth of cigarettes from Belfast docks. So-called punishment beatings and shootings continue in nationalist areas of the north.

McLaughlin said that republicans would consider further movement on decommissioning - the key issue threatening the Good Friday Agreement - only if the British Government met their demands on policing and human rights.

He said Tony Blair's attitude to their concerns during last week's aborted Weston Park talks was 'not encouraging.' He claimed the Prime Minister was primarily concerned with shoring up the position of David Trimble, the Ulster Unionist leader.

He added that if the document drafted by Blair and Taoiseach Bertie Ahern aimed at breaking the political impasse did not meet Sinn Fein demands then there was no chance of movement on decommissioning.

The two governments plan to deliver their plans to the Northern Ireland parties next week.